Telecoms.com – Telcos are a commodity and not innovative; so what?

While the world is worried about the trend of commoditization, a former Ericsson and Smartone telecoms industry heavyweight is asking what the big deal is.

Bengt Nordström, now CEO of consultancy Northstream, can boast of a more hands-off view on the telco landscape, and questions what the panic is all about. Yes, the telcos are being viewed as less innovative every day, and yes, business models are becoming more commoditized each week, but is that an issue?

“It’s not,” said Nordström in an interview with Telecoms.com. “We are saying this to all our clients that you’re in the best part of the value chain.

“The trend which we are likely to see over the next couple of years is the deterioration of revenues, because what telcos are bringing to the market is fairly commoditized and very similar to competitors. But there is an upside, the cost structures are too high.

“They can do what they do today and even better, by trimming the organization such as replacing legacy equipment and processes or hiring and retraining new people. They can still maintain margins even though top-line revenues are shrinking.”